Medical Bills, Health Insurance, and Liens

The question we hear most in the first meeting is not "what is my case worth." It is "who is going to pay these bills." The hospital wants money now; the at-fault driver's insurer will not pay until the case is over, and then only once. This chapter explains how to bridge that gap, what the people who pay your bills along the way are entitled to get back, and why lien work at the end of a case matters as much as the settlement number.

Who pays while the case is pending

Ohio is an at-fault state. The at-fault driver's liability insurer does not pay your bills as they come in; it pays once, at the end, in exchange for a release of all claims. Until then, the practical sources of payment are:

1. Your health insurance. Your first stop for nearly all treatment; contracted providers must accept the contracted rate as payment in full, which shrinks the bill dramatically.
2. MedPay on your auto policy. Pays regardless of fault, with no deductible, up to its limit. Use it for copays, deductibles, and anything health insurance will not cover. Our post on MedPay claims and bad faith explains what to do when the carrier drags its feet.
3. Medicare or Medicaid, if you are enrolled. Both pay, and both have a right to be repaid.
4. Letters of protection, discussed below, for people with no coverage at all.

We walk through these coverages in Using Your Own Insurance. There is almost always a way to keep treating, and stopping because you are worried about bills is the most damaging thing you can do to your health and your case; see Focus on Treatment First.

What a lien is, in plain terms

A lien, in this context, is a legal claim on part of your settlement by someone who paid for your care or treated you on credit. "Subrogation" means the payer steps into your shoes and can pursue the at-fault party in your place; "reimbursement" means the payer is entitled to be paid back out of whatever you recover. Most health plans claim both.

Every lien has to be identified, verified, and resolved before settlement money is distributed; ignoring a valid lien can leave the client, and the lawyer, personally liable.

Your health insurer's right to be repaid, and Ohio's make-whole rule

Your health plan almost certainly contains a clause allowing it to recover what it paid from your settlement when someone else caused your injury. Ohio law limits how far that right reaches.

R.C. 2323.44 governs the rights of a "subrogee," which includes health insurers, self-funded benefit plans, and anyone else with a contractual or common-law right to be repaid out of a tort recovery. The key rule: if you recover less than the full value of your claim because of comparative negligence, limits on liability, or limited collectible insurance, the subrogee's claim is reduced in the same proportion as yours. Disputes over how a recovery is divided can be resolved in a declaratory judgment action.

Suppose your damages are fairly valued at $200,000, your health insurer paid $40,000 in bills, and the at-fault driver has a $100,000 policy with nothing else to collect. You recovered half of your full value, so under R.C. 2323.44 the health insurer's claim is cut in half, to $20,000, before any further negotiation.

Lawyers call this a "make-whole" rule. It is one of the most useful tools in Ohio law for injured people, and plan administrators who send form letters demanding every dollar tend to stop when someone cites the statute.

Medicare's conditional payments

If Medicare paid for crash-related treatment, federal law treats those payments as "conditional": Medicare paid on the condition that it be reimbursed when the responsible party or its insurer pays. The Medicare Secondary Payer law, 42 U.S.C. 1395y(b)(2), gives the government a right of recovery and a process for obtaining the conditional payment amount before settlement.

Medicare liens are reduced by a share of attorney fees and costs and can be reduced further by challenging unrelated charges or seeking a hardship waiver, but Medicare does not go away because it was not notified. We open a file with Medicare's recovery contractor early and keep the conditional payment letter updated.

Ohio Medicaid

If Ohio Medicaid paid, R.C. 5160.37 gives the Ohio Department of Medicaid an automatic right of recovery from your settlement and requires you, or your attorney, to give the department written notice within thirty days of starting a claim or filing suit.

R.C. 5160.37 also sets a formula: after attorney fees (capped at one-third for this purpose) and costs are deducted, Medicaid is presumed to receive the lesser of one-half of what remains or the amount it actually paid. The presumption can be challenged with clear and convincing evidence that a different allocation is warranted, with the funds held in escrow meanwhile. The current version took effect September 30, 2025; older summaries may be out of date.

ERISA self-funded plans

Many large employers pay employee medical claims out of company funds and hire an insurer only to administer the plan. These "self-funded" plans are governed by a federal law called ERISA, and because federal law controls, a self-funded plan can argue that Ohio's make-whole rule does not apply to it; some plan documents demand full reimbursement regardless of how little you recover.

Whether a plan is truly self-funded, and whether its documents say what the recovery vendor claims, must be verified from the plan documents themselves, which we request in every ERISA case. Many plans that threaten "full reimbursement" turn out to be fully insured or to have language that does not support the demand, and even a plan with the stronger legal position usually has room to negotiate.

Letters of protection

A letter of protection is your lawyer's written promise to a treating provider that it will be paid out of your settlement, in exchange for treating you now without sending the account to collections. For a person with no health insurance, it can be the only way to get care.

Letters of protection have a cost: the provider bills at full rates with no contractual discount, the entire bill becomes a lien on your recovery, and defense lawyers argue the provider has a financial stake in your case. We use them when needed and negotiate those bills hard at the end.

The collateral-source rule and what the jury hears

A "collateral source" is anyone other than the defendant who paid for your losses: your health insurer, MedPay, Medicare, a disability policy. Historically, the jury never heard about those payments.

Ohio changed that rule by statute. R.C. 2315.20 lets a defendant introduce evidence of collateral benefits, but not if the source has a contractual, statutory, or federal right of subrogation, which nearly every health plan, Medicare, and Medicaid has. And if a defendant does introduce such evidence, the statute strips that source of any right to be repaid from you. In practice, defendants rarely use it.

The second half comes from the Supreme Court of Ohio. In Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, the court held that both the amount a provider originally billed and the amount it accepted as full payment are admissible on the reasonable value of medical care, and the jury may find that value is the billed amount, the paid amount, or somewhere in between. A write-off, the court reasoned, is not a "benefit" paid by anyone, so the collateral-source rule does not bar evidence of it.

In practice, the defense argues your medical damages are the discounted amount, we present the full bills, and the jury decides. For future care, there is no paid amount yet; see our post on recovering future medical expenses in Ohio.

How hospitals bill, and why it matters

Hospitals sometimes refuse to bill your health insurance after a crash and instead send the full-rate bill to the at-fault driver's insurer, or to you, hoping to collect more. Insist in writing that the hospital bill your health insurance. Keep the explanation of benefits (EOB) for every claim; it shows the billed amount, the contractual adjustment, and what was paid, and it is what we use to audit every lien. Watch for duplicate charges, charges unrelated to the crash, and balance billing (an in-network provider charging you the difference between its full rate and the contracted rate); all are negotiable, and some are simply improper.

Negotiating liens at settlement

Lien resolution is where a good result becomes money in your pocket. The steps are the same in every case:

1. Identify every payer and provider with a balance.
2. Obtain an itemized ledger from each and audit it for unrelated or duplicate charges.
3. Apply the law: R.C. 2323.44 for private plans, R.C. 5160.37 for Medicaid, the federal fee reduction for Medicare, the plan documents for ERISA plans.
4. Negotiate; most private lienholders accept a meaningful reduction once they understand the limits of the recovery and the cost of fighting.
5. Document the resolution in writing before any money moves.

A $20,000 lien reduction is worth exactly as much to you as a $20,000 increase in the settlement, and it is often easier to obtain. That is why we handle lien resolution ourselves and build it into the timeline before the demand goes out. When we discuss what your case is worth, the net after liens is the number that matters.

Key takeaways

• Use your health insurance and MedPay to keep treating; the at-fault insurer pays only at the end.
• Health plans can be repaid from your settlement, but R.C. 2323.44 cuts their claim proportionally when you are not fully compensated.
• Medicare and Medicaid must be notified and repaid under their own rules.
• Under Robinson v. Bates, the jury sees both billed and paid amounts and decides the reasonable value of your care.
• Lien negotiation at the end of the case is money in your pocket; it should be done by your lawyer.